THE rumors where right, although the word on the buyer was off-target. All week rumors that Deutsche Bank was on the verge of buying JP Morgan made the rounds on the Street. The rumors were bolstered by the mysterious cancellation of a scheduled speaking engagement by Morgan's CEO yesterday. Turns out that the rumors were mostly right as word spread last night that the actual buyer would be Chase. The sides confirmed the deal this morning.

How will the $32 billion deal will affect the fund businesses of the two firms is not yet clear. J.P. Morgan has its own funds and owns 45 percent of American Century with an option to buy another five percent of that business later this year. Chase offers the Vista fund family and the Fleming Funds, which is acquired in its Fleming Asset Management pickup.

Reports of the deal

The Washington Post reports that the deal was completed last night. It also is the only publication to say that just a few months ago J.P. Morgan was only asking for closer to $20 billion from prospective buyers.

The Financial Times of London notes that the premium price Chase is paying reflects the cost of "being rebuffed by most of the remaining independent US brokerages over the past two years." One of those firms that rebuffed it is Merrill Lynch, according to the paper. It also noted that "JP Morgan's London staff were sanguine" and not especially worried about losing their jobs.

The New York Post, which published its story prior to the announcement of the deal, pegged the price at more than $30 billion and speculated that Chase's William Harrison will probably be CEO of the new bank and JP Morgan's Douglas Warner the chairman, and that the J.P. Morgan name will be retained (turns out the name will be J.P. Morgan Chase, but the paper was on target with the roles).

The paper also points out that the deal leaves Lehman Brothers and Bear Stearns & Co and the last big boys standing. The paper also reports that Deutsche Bank was indeed interested in Morgan, but that its problems with getting a U.S. listing was a stumbling block to closing a deal.

USA Today pegs the combined firm's assets most exactly: $667 billion. It notes that the firms will have 90,000 employees, profits of $7.5 billion on revenues of $52 billion. It also claims that Morgan had been talking with Merrill Lynch.

The New York Times ads that on a pro forma basis, J.P. Morgan Chase would have had net income of about $7.5 billion last year on revenue of $31 billion. And that the combined firms will see about $1.9 billion in pre-tax cost savings by the end of the second year following the completion of the deal. The reported costs of the merger are about $2.8 billion.

The Wall Street Journal reports the value of the deal at $38.58 billion in stock. The paper also pithily notes that the "globalization of finance has become the Americanization of finance." Only a handful of European banks such as Deutsche Bank AG remain "serious contenders to be a global survivor," it says.

The details of the merger disclosed in the report include that the deal is set to close in the first quarter of 2001. Each common share of J.P. Morgan will be exchanged for 3.7 common shares of Chase, putting the price at the time of the announcement at roughly $207.42 - or up about $30 from JP Morgan's close on Tuesday.

Together, the two companies would have $660 billion in assets, placing it third to Citigroup, with $800 billion, and Bank of America, with $680 billion. The paper reports that the new company will take the moniker of J.P. Morgan Chase and that the wholesale business and investment banking arm will go by J.P. Morgan while the retail business will be known as Chase.

The paper also notes that Chase is clearly in the driver's seat. It is taking eight director's seats compared to five from J.P. Morgan. The management committee will have 11 members from Chase, and only four from Morgan. Also two Chase executives -- Geoffrey Boisi and Donald Layton - will be co-heads of investment banking. However, Neal Garonzik, Chase's head of asset management, will be leaving the combined firm.

The report also delves into some of the storied histories of the two firms. George Peabody founded J.P. Morgan in 1838. It was one of his eventual partners was the father of J. Pierpont Morgan. The bank also bailed out the nation's financial system during the Panic of 1907 and again in the Eighties with the bailout of Chicago's Continental Illinois.

Chase dates to 1877 when it was the Chase National Bank of the City of New York and took its name from Treasury Secretary Salmon P. Chase. It's 1930 merger with Equitable Trust made it the biggest U.S. bank and brought it into the fold of John D. Rockefeller Jr.

The Times ads more color to Chase's history. It says the bank was formed in 1799 by Aaron Burr, a one-time vice president of the U.S., and that Manhattan Bank financed the Erie Canal before it merged with Chase National Bank in 1955.

It turns out that Chase first looked at merging or buying J.P. Morgan in the 1950s, but got the "brush-off", according to the paper.

The Associated Press also circulated a list of milestone events in the firm's businesses which was published in the New York Times.

A second story in the Wall Street Joournal reports on the increasing pressure of some securities firms to find a merger partner of their own. It also points to Lehman Brothers Holdings Inc. and Bear Stearns Cos., as those under the most pressure. It adds that even Merrill Lynch & Co. and Goldman Sachs Group Inc., as well as other big bank companies such as Bank of America Corp. and First Union Corp. may feel pressure from the deal.

The article quotes an analyst - Sanford Bernstien's Ron Mandle as noting that JP Morgan Chase's $100 billion market cap is substantially larger than Goldman Sach's $64 billion or Merrill's $57 billion. The article implies that this may mean even American Express Co., with a market cap of $82 billion, may end up needing a partner.

Meanwhile, Lehman and Bear Stearns may feel pressure to beef-up their fixed income areas since that is one market where "bigger means better." While, the banks -- Bank of America, First Union and FleetBoston Financial Corp. -- will find that their falling behind Chase in the securities business would bring them pressure to find a partner.

A sidebar in the New York Times also details the storied history of J.P. Morgan, including its efforts over the last 20 years to remake itself from "a sleepy bank devoted simply to lending money to big governments and corporations" into a descendant of the House of Morgan with a pioneering spirit. The paper also says that Morgan failed to "find a comfortable position in the modern financial world," leading to today's sale. &nbsp